NPS: If you’re already invested in the National Pension System (NPS) or thinking about it, this update is perfect for you. An exciting new NPS scheme called “NPS Health” is launching soon. This innovative plan combines health insurance protection with retirement savings in one package. Finance Minister Nirmala Sitharaman is set to introduce the scheme on October 1st. Let’s dive into what this plan offers.
What is NPS Health Scheme?
Based on recent reports, the NPS health plan features two key components. First, you’ll have a dedicated investment account where your contributions grow over time. Second, it includes a mandatory super top-up health insurance policy that kicks in to cover eligible medical expenses once you’ve reached your annual deductible. Plus, you can withdraw from your NPS health savings for qualifying healthcare needs according to the scheme’s withdrawal guidelines.
Who can join NPS Health?
If you’re eligible for NPS, you can sign up for NPS Health, following the scheme’s specific terms and conditions. The standard health insurance covers you, your spouse, and up to two dependent children as a family floater plan. Keep in mind that parents aren’t included in this coverage. You can enroll between ages 18 and 70, and with policy approval, you can renew your coverage until age 85.
What’s the initial contribution amount?
Your first contribution to the NPS health plan has three parts: your first year’s health insurance premium plus applicable taxes, an annual maintenance fee of Rs 200, and a minimum opening deposit of Rs 1,000 in your NPS health investment account. Going forward, you can contribute as little as Rs 10. Just remember that your health insurance premium isn’t fixed—the insurer will calculate it based on your age and relevant guidelines.
What health insurance benefits do you receive?
The Standard Super Topup policy provides family-floater coverage with four different deductible and coverage options: Rs 10,000 deductible – Rs 1 lakh cover.
Here are your coverage options with deductibles:
Rs 50,000 deductible – Rs 5 lakh cover
Rs 1 lakh deductible – Rs 10 lakh cover
Rs 3 lakh deductible – Rs 30 lakh cover
To break it down simply: a deductible is the amount you’ll need to pay out of pocket for eligible medical expenses before your insurance policy kicks in and starts covering costs.
Can you access funds from my NPS health account for medical expenses?
Absolutely! As a subscriber, you’re able to make partial withdrawals to cover eligible healthcare expenses (both outpatient and inpatient care). Keep in mind that you can withdraw up to 25% of what you’ve contributed to your NPS health account. The good news is there’s no cap on how many times you can withdraw, and you don’t need to wait any specific period before making your first or any future withdrawals. One thing to note: the funds won’t come directly to you. Instead, the payment goes straight to your hospital, healthcare provider, or other qualified healthcare entity.